Australian Private Credit Probe Faces Hurdles From Trading, Fees
- Lack of secondary market makes valuations hard: fund manager
- Regulatory scrutiny steps up as wealth, retail investors grow
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An Australian corporate watchdog’s probe into the private credit market faces challenges including the absence of a secondary loan market and non-standardized fees, underscoring the risks particularly for retail investors in the growing market.
The Australian Securities & Investments Commission is conducting a two-year private-markets review amid persistent concerns over loan valuations. With trading in the after-issuance market thin — as most investors buy and then hold the loan — the regulator faces headwinds in a sector estimated by advisory firm Alvarez & Marsal as accounting over 10% of the country’s A$1.4 trillion ($892 billion) corporate debt in 2023.